Francis Inc

question 32

Multiple Choice

Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1?

• A) $2.20
• B) $2.44
• C) $2.69
• D) $2.96
• E) $3.25

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Definitions:

Opportunity Cost

The cost of forgone alternatives, or the benefits that could have been received by choosing the next best alternative.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses, including oil and feedstock.

Alfalfa

Alfalfa is a perennial flowering plant widely cultivated as fodder for cattle due to its high nutrient content.

Comparative Advantage

An economic principle that suggests a country, individual, or company is most efficient at producing a certain good or service compared to others, enabling trade benefits.